Understand the Value Drivers: How to Get Marketing Spend Under Management in 2016 (Part 2) [Plus+]

In the first installment of this Plus series, we discussed how, despite the fact that we have known for almost a decade that the marketing category contains significant value that can be unlocked with good procurement practices and processes, in most organizations, marketing is still a “sacred-cow” category that is out of procurement’s reach. In these organizations, marketing still insists that it cannot be constrained by procurement logic in its quest for the best agency magic and that it’s not how much you spend but how much business value you generate. And while this is mostly true, it’s not entirely true. It’s about spending wisely so that every additional dollar of spend generates additional, measurable value for the brand. Marketing’s entire purpose — increasing sales and brand value — cannot be done without spending hard dollars, and, generally, success will correlate with how much is spent. As a result, the goal is to always increase, not decrease, the available marketing budget. This is one category where it’s not about savings but about value delivered. As a result, the money needs to be spent on agencies that produce campaigns that generate results, and on third parties that provide the products and services that support the campaigns (print, digital media, etc.). However, one cannot even begin to contemplate who the right parties are until one understands the value drivers that need to be considered and addressed. So how to make logic + magic = profits? First, in this installment, we will discuss the four biggest value drivers to marketing — understanding those will be key to gaining their trust and getting their spend under management.